Introduction: When Medical Bills Take Over Your Life
A single hospital visit can leave Minnesota families drowning in debt. Even with insurance, deductibles, co-pays, and uncovered treatments can add up to thousands of dollars. When you can’t keep up, the bills often go to collections, wreck your credit, and lead to nonstop calls from debt collectors.
If you’re buried in medical debt, bankruptcy in Minnesota may give you relief. Chapter 7 can erase medical bills entirely, while Chapter 13 can reduce what you owe and give you time to pay on manageable terms. In this guide, we’ll break down how it works and what it means for your fresh start.
How Medical Debt Builds Up in Minnesota
Even responsible, hardworking people fall into medical debt. Common scenarios include:
A sudden accident or illness with huge ER or hospital bills.
High-deductible insurance plans that leave families exposed.
Ongoing treatment for chronic conditions.
Prescription costs not fully covered by insurance.
What often starts as a few unpaid bills quickly snowballs into collection accounts, lawsuits, wage garnishments, or bank account levies.
How Medical Debt Affects Your Life
Collection harassment – Calls, letters, and threats become daily stress.
Judgments and garnishment – Creditors may sue and take up to 25% of your wages.
Emotional strain – Medical debt creates guilt, shame, and stress at a time when you should be focused on healing.
Bankruptcy exists to protect people from exactly this kind of debt spiral.
Chapter 7 Bankruptcy and Medical Debt
For most Minnesotans, Chapter 7 bankruptcy is the fastest and cleanest way to erase medical debt.
Medical bills are unsecured debts, just like credit cards or payday loans.
In Chapter 7, they’re wiped out completely within 3–4 months.
Most clients keep their home, car, and everyday belongings thanks to Minnesota exemptions.
Once filed, the automatic stay stops collections, lawsuits, and garnishments immediately.
For families who can’t see a way out, Chapter 7 is often the fresh start they need.
Chapter 13 Bankruptcy and Medical Debt
If you don’t qualify for Chapter 7 or need to save a house or car from foreclosure/repo, Chapter 13 bankruptcy offers another path.
Medical bills are included in your repayment plan.
You typically repay only a fraction, sometimes pennies on the dollar.
The repayment period usually lasts 5 years.
At the end, the remaining medical debt is discharged.
Chapter 13 gives breathing room while protecting property and spreading out payments.
Common Myths About Bankruptcy and Medical Debt
“I’ll lose my home or car.” – False. Most clients keep everything they need.
“Bankruptcy ruins your credit forever.” – False. Many see scores improve within 1–2 years.
“Only irresponsible people file bankruptcy.” – False. Medical debt is one of the top reasons for bankruptcy in the U.S.
“My doctor will find out.” – False. Most doctors are not involved with the bill and do not even see if there is an outstanding bill or financial obligation.
Conclusion: Don’t Let Medical Debt Control Your Life
If you’re buried under hospital or doctor bills, know this: medical debt is exactly the kind of debt bankruptcy was designed to handle.
In Minnesota and ready to talk about eliminating medical debt with bankruptcy?
Schedule a free consult with bankruptcy lawyer Todd Murray.
Since 2009, Todd has helped hundreds of Minnesotans get out of debt. His work has saved his clients millions of dollars (and many sleepless nights) in the process. Todd’s clients have described him as “very professional and easy to work with.” He lives in Minneapolis with his wife and four children.